LONDON: The Board of K3 Business Technology announced an agreement with SYSPRO, a global ERP software provider controlled by Advent, to sell K3’s subsidiary, NexSys, for £36 million.
NexSys, a leading SYSPRO partner in the UK, has over 40 years of experience in providing business software solutions.
Financial Details
– NexSys generated £12.1m revenue and £3.6m operating profit in 2023.
– The sale price is 28.8% higher than K3’s market value of £28m.
– After costs, K3 expects to receive £34.4m from the sale.
Sale Conditions and Proceeds
– The sale requires shareholder approval at a meeting on 19 December 2024.
– Post-sale, K3 expects to break even in cash flow by early 2025.
– Most of the sale proceeds will be returned to shareholders in the first half of 2025.
The sale follows K3’s strategy to simplify its operations and focus on cash generation after management changes in late 2023. The Directors believe SYSPRO is a good fit for NexSys, which will benefit from SYSPRO’s global reach and resources.
A general meeting for shareholder approval is scheduled for 19 December 2024, with the sale expected to complete by 8 January 2025.
Eric Dodd, Chief Executive Officer of K3 Business Technology Group plc, said: “As the UK and Ireland’s largest reseller of SYSPRO software, our NexSys business is a superb fit for Advent, and we are delighted to have reached this agreement. Advent is a leading technology investor and its purchase of NexSys is a natural next step following its recent acquisition of a majority holding in SYPRO. Advent has the resources and market experience to more fully capitalise on NexSys’s strategic value.
“We view the proposed sale as an excellent outcome for K3 shareholders, NexSys, and Advent and recommend that shareholders vote in favour the proposed sale at the Company’s General Meeting in December.”
Jaco Maritz, Chief Executive Officer of SYSPRO, said: “SYSPRO, an Advent and Safari company, believes that NexSys is a compelling strategic fit given the company’s position as a trusted provider of digital solutions to manufacturing and distribution companies across the UK and Europe.”
“The carve-out acquisition is a key milestone in Safari’s SYSPRO strategy to expand its global footprint, strengthening its presence in the UK and extending its reach across Europe. The acquisition will also enable SYSPRO to expand its highly regarded digital manufacturing suite with new products and capabilities.”
“Safari believes there are further initiatives that would help accelerate its existing strategy and which it intends to confirm after a detailed review of the business and operations following Completion. Safari and SYSPRO attaches great importance and value to the skills, experience and commitment of the existing management and employees of NexSys.”
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